RESPs are a strange beast. The lifetime contribution limit is $50,000, but government only matches for up to $2,500 annually, and only up tp $36,000 total. That means the optimum strategy is to contribute $14,000 immediately when a child is born, and then $2,500 in each subsequent year until the maximum of $50,000 is reached.
If your sister is like most young parents (myself included), she will not have $14,000 sitting around as a lump sum to put into an RESP and will instead contribute $2,500 every year, into the late teenage years. In that case, there are two cheap investment options:
1) Invest a lump sum of $2,500 once a year in an ETF. Vanguard VBAL is an option that automatically rebalances and includes a world-wide balanced portfolio. A discount brokerage like TD Waterhouse would charge a commission of $10 for each purchase.
2) Make biweekly contributions. In that case, an index fund is too expensive as a result of commissions, but TD Canada Trust has a series of mutual funds called "e-series" with a very low management exchange ratio. This is the option I have used with my kids. I am contributing $100 per child biweekly, split as follows:
$25 - Canadian Index - e
$25 - U.S. Index - e
$25 - International Index - e
$25 - Canadian Bond Index - e
I have had an excellent experience with TD and would recommend them. They can set up either a TD Waterhouse trading account (for option 1) or a mutual fund account (for option 2).
